Profit before principle? An experimental assessment of incentive schemes encouraging consumers’ role in product end-of-life returns

Helinski, Cindy; Englisch, Christina Luisa; Westmattelmann, Daniel; Schewe, Gerhard

Abstract

In the circular economy, an effective reverse supply chain is crucial, necessitating consumers to return end-of-life products rather than discard them. However, voluntary returns lack consistent motivation. While incentive programs might enhance return behaviors, the driving factors – whether based on sustainability principles or profit motives – remain unclear. Using self-determination theory, our study examines these dynamics in the cosmetics industry to uncover incentive efficiency and underlying mechanisms. We conducted an online experiment with 509 participants to empirically test four incentive schemes: 1) none, 2) financial, 3) sustainable, and 4) financial and sustainable incentives combined. Mean value comparisons indicate that the willingness to return increases for all participants after being informed about return opportunities, with financial and combined incentives differing significantly from the other groups, displaying the strongest intention to return. Experimental group-specific structural equation modeling analyses indicate that in all experimental groups, perceived intrinsic and extrinsic values positively affect the attitude towards returning packaging, which in turn is positively related to willingness to return. On the other hand, green consumer value only has a positive effect on willingness to return in the context of sustainable incentives. This study represents the first systematic approach to EOL incentive schemes, building on a new theoretical perspective and providing actionable strategies for retailers to advance the role of consumers in the circular economy.